Retirement. We think about it. We (hopefully) plan for it. Until retirement is actually upon us, though, it's just an abstract concept; it's "out there" somewhere. To really understand retirement, we need to make it part of our own lives. Sure, retirement means doing the things we've always wanted to do. But in the midst of our working lives, how often do we actually get a chance to think about what we really want?

As for me, I just retired after 20 years of walking a beat (actually, we drove the beat in my town).  More time in my woodworking shop is at the top of my list. So is spending time on the water -- a new 24-foot cabin cruiser is in my future. Also on the list is a second career. What's on your list? Do you even have one?

Putting a plan into action
Although it's good to have a list of ideas that you want to pursue when you no longer have to work that 9-to-5 grind, you need to transform the ideas from a list on paper into specific dollar amounts that you will need in retirement.

Being able to fulfill your retirement dreams comes down in large part to budgeting for them. You need to separate your "wants" from your "needs" and develop a financial action plan. For example, the personal finance experts at Motley Fool Green Light have developed a number of action plans that allow you to create a cash cushion, get out of debt, or even open a brokerage account. With step-by-step checklists that you can add to your list of goals, you can create a complete plan of attack.

It's all about you
Start with your needs. What do you have to do? Pay off your credit cards? Buy a house or pay down an existing mortgage? Buy a new car? Put them all on your list.

Next create a list of your wants. Buy a Harley? A boat? Retire in seven years? Travel the world? Now's not the time to hold back. Plan. Dream! These are your retirement years and you're going to want to enjoy them. So if it's puttering around in your garden or visiting the Royal Botanic Gardens in Surrey, England, put it down.

For both lists, jot down your top five financial goals and determine which ones are long-term, which ones are near-term, and which ones you want to do right away. Let the rest fall in line behind the top five.

Next, turn these generalized goals into specific objectives by adding dates you want them accomplished by, dollar amounts they're going to cost you, and how you plan to achieve each one. Here's what some might look like:

  • Establish a Roth IRA for both yourself and your spouse with a payroll deduction or an automatic contribution from your checking account of $300 per month.
  • Save for a down payment on a house in three years by adding an additional $500 per month to the existing $30,000 in your money market account.
  • Pay off your mortgage in five years by adding $400 per month to each regular monthly payment.

Where you at?
Remember, each of these objectives is competing for your limited dollars. Thinking about them all at the same time challenges you to prioritize them. As you confront the costs involved, you might change your mind about your priorities. For instance, paying off your credit cards sooner may become more important in order to divert more savings to your retirement funds. Maybe instead of the royal gardens in Surrey, you'll find a trip to the New York Botanical Gardens more in line with your resources. Of course, there's the possibility you may have to dream more!

After you've created this realistic framework for the amount of money you will need in retirement, you need to see how much you need to invest to finance a comfortable retirement. The Motley Fool has a whole set of calculators that can help you plan for your future.

You are not alone
Retirement can seem daunting if you don't have a plan in place for achieving it. By taking the time now to sort your priorities, you can knock down those big ideas into smaller, workable chunks.

If you don't know where to begin, take a look at the retirement action plan at Motley Fool Green Light. With a 30-day risk-free trial subscription, not only do you get the monthly newsletter, but you have full access to all the checklists and "take action" plans that you can print out, as well as the chance to question the experts on pressing issues you face. You've got nothing to lose.

As for me, I'm going back to checking out those boat manufacturer websites.

Once you've got your basic action plan in place, you can learn a lot more about specific retirement issues from our Rule Your Retirement service. As with all of our newsletters, you can take a free 30-day look with no obligation.

Fool contributor Rich Duprey is currently enjoying retirement in the Garden State. The Motley Fool has a disclosure policy.